The U.S. Securities and Exchange Commission recently made headlines by charging three individuals with impersonating securities brokers and investment advisers in a scheme involving digital assets. The complaint, filed on December 11, alleges that the defendants, who are Nigerian nationals, diverted over $2.9 million from at least 28 investors by directing them towards fraudulent platforms and instructing them to purchase Bitcoin before transferring the funds to blockchain addresses linked to the scammers.
According to the SEC, the defendants went to great lengths to deceive investors, creating fake websites impersonating professionals from established U.S. firms and using voice-modification software, online group chats, and social media to build trust and attract victims. This sophisticated impersonation scam highlights the growing use of technology, including AI-driven content and deepfake audio or video, by fraudsters to carry out their schemes.
Investors were lured in by promises of monthly returns of up to 25% and shown fake investment account interfaces displaying unrealized gains. However, the funds were never actually invested as claimed, and attempts to withdraw assets resulted in demands for additional fees. The scammers also utilized voice-changing software, spoofed phone numbers, encrypted messaging apps, and multiple Bitcoin addresses to make it difficult for investors to verify identities and trace assets.
The SEC’s Crypto Assets and Cyber Unit, along with other regulatory bodies, took action against the defendants, charging them with multiple violations of federal securities laws. The agency is seeking permanent injunctions, disgorgement with prejudgment interest, and civil penalties to halt further misconduct and recover stolen funds.
In response to this case and others like it, the Office of Investor Education and Advocacy issued an alert in collaboration with the FBI, advising investors to verify identities through trusted sources, avoid unverified contact details, and exercise caution when asked to send funds via cryptocurrency. These recommendations aim to protect investors from falling victim to similar scams in the future.
Overall, the SEC’s enforcement actions underscore the agency’s commitment to combating fraud in the rapidly evolving crypto market. By targeting schemes that exploit decentralized financial networks and digital asset platforms, the SEC aims to safeguard investors and maintain the integrity of the financial markets.